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Real Long Term Cost vs. Battery life

let me start by saying two things:

a) I am very very excited to received my Tesla Model S
b) despite the questions below - I have placed my own money on this car…

Question and thoughts center around the longevity of the battery (a question no one can answer) and cost of replacement

1. we know the cost to replace an 85 kwh battery is ~\$12,000
2. we know the warranty is 8 years/unlimited mileage
3. we know batteries maximum charge degrade over time
4. eventually it will be worth while to replace the battery to get back to the vehicle's original capabilities

therefore I believe we have the consider the cost of the battery replacement in the annual cost to "fuel" the vehicle and if you do this the cost to run the car per-mile vs. an ICE car by tesla's own numbers is not very favorable

Assumptions: 15,000 miles year, ICE 22 MPG, gas = \$3.80 gallon, kwh's = \$0.11/kwh

by Tesla's own numbers @ http://www.teslamotors.com/goelectric#savings
ICE Car = \$2591 year in fuel cost \$0.17 per-mile in fuel
Model S = \$467 year in fuel cost \$0.03 per-mile in fuel

that is until you figure in the cost of replacing the fuel tank at the end of an 8 year life span (the battery) - for which you have to budget \$1500 year - making the cost of the Tesla's fuel system \$1967/year or \$0.13 per-mile in fuel…

now I know there are other costs the ICE car has - but for purposes of this thought exercise let's focus on the "fuel" system cost and treat the battery as the moral equivalent of the "fuel tank". Which in an ICE car doesn't shrink, or need to be replaced in 8 years.

Even a 16 year replacement is \$750/year in "fuel" cost to the battery…that still seems to be far less of an advantage than most people would initially consider?

Are there estimates of what the maximum charge of an 85 kwh battery will be in 8 years? What % a year will we as customer lose? How much will my fuel tank shrink each year?

I'm thinking I would replace the battery after it loses 20-25% (300 miles - 75 miles of loss = 225 miles of range - time to swap batteries) of it's maximum range, and if that happens in less than 8 years my fuel-system costs now approach the cost of driving an ICE vehicle…

I'm still excited to get my car, and I'm committed to the success of EV's - but I'm still having trouble with the actual economic benefits when the total life cycle cost is considered - in this case the full costs given the battery replacement cost amortized into the car seem to dramatically change the cost curves.

thoughts, comments, if it takes 20 years to lose 10% capacity then we're good, however if it's more like 20% in 6 years I think the battery cost make the car more expensive to drive.

@tsx_5
I said 10-15% per year in battery performance improvement over next 8 years- twice your quote from a history perspective; It's real simply, if you don't believe that science, then stick with an ICE car; what's the big deal - live your own belief system

@tsx_5
This is indicative of your other claims of fact that are incorrect
That Chrysler Lifetime Powertrain Warranty was a offered in 2007 as a marketing ploy, because it wasn't transferable on sale of the car, so they were just playing a statistical game knowing people don't keep their cars a lifetime. That calculation against increased sales from the marketing- It had nothing to do with the actual cost of replacement of Powertrain's after 8-10 years of design life.

And most importantly, they LOST THAT BET. I t cost them a fortune, so they dropped it 3 years later in 2009-10

Nobody else has offered it since on major production basis. Of course some like Mercedes essentially price in a potion of those coverages into the car like Maytag, but the cost is all there; After 8-10 years, ya gotta cough up the \$10k-\$20k to make it happen (or pay it up front like Tesla's battery program); And It's about the same cost as the battery in the Tesla- but the Tesla doesn't have anything else major to replace over a 20+ year life. And the battery costs are coming down over time- Powertrain costs are not...

some have stated 1.7% per year

& if you search Stanford, Tesla on youtube a TM engineer speaks of the battery.
It's long but interesting.

What if the battery of Model S, particularly 85kWh, will last the lifetime of the car and replacement is not necessary?

kenliles,

Ok -- you got me on the warranty. I haven't bought a new vehicle in 7 - 8 years (and that was for my at the time wife), so I googled and came across the chrysler warranty. Then I failed to do check it, my bad.

I, for one, will think long and hard before replacing the battery, even when it has degraded to 50% of the original range (I have the 85KWH). For me, and I suspect for many others, even in the degraded mode it will serve me very well for about 95% of the driving I do. Unless the replacement cost and terms are very compelling (e.g., 500 miles range that would greatly simplify cross-country travel), I'll probably continue to drive it until battery degradation makes it impractical for even my local trips.

@tsx_5
I've done the same thing myself. Good to keep each other on our toes!
no worries;

From what I understand and electric motor itself does not need maintenance, though I think I've read that this car's transmission still needs oil changes which is still pretty cheap. An ICE will need a lot of maintenance over 8 years. Here are some things that would need to be maintained in an ICE: belts, oil, oil filter, intake filter, spark plugs, spark plug wires, fuel filter, water pump, and radiator coolant fluid. And of course there are other things that would need to be replaced if they break or stop functioning properly like fans, the many sensors and ICE has, fuel injectors, hoses, valves, piston rings, gaskets, and there's more. I think this would add to the advantage of having an electric motor.

I'm not sure where this line of thinking comes from (eg warranty is 8 years so replace at 8 years or car only serves __% of the intended purpose in 8yrs so I'm going to spend a fortune making it new again)? By that thinking you would scrap any ICE car every time the warranty ran out (eg 4yrs, etc) and buy a new one. Do the TCO on that and you'll be horrified. Similarly a ICE vehicle is not nearly as efficient at 8yrs as an mpg or maintenance matter (\$2000/yr to keep a large luxury ICE car in tip-top shape at 8yrs vs \$500/yr at inception). The Tesla should be an awesome car from years 8-12, but not the same awesome it is now but rather awesome to another person (or you) for another application (much like an ICE car). I don't think many here who like shiny new things will be driving an 8-12yr old car, they'll sell it and get the 1000mi range EV that does 0-60 in 2.5 with 10min charging at every corner that will be available by then.

Let's assume that the battery degradation on your Model S after 8 years is unacceptable and you wish to replace the battery but want to keep the car.

Even if the battery capacity and cost is identical in 8 years to what it is today (unlikely, in my view, more likely to have more capacity with less cost, but for the sake of argument lets assume it will cost \$12000 to replace the 85kwh battery), and lets assume that you have taken good car of your car and the interior and body are in good condition. You will essentially be getting a nearly new car for the cost of a new battery with another 8 years of use at that capacity! The cost of replacing a battery will certainly be fraction of the cost of buying a whole new car, you keep the depreciation (paying far less in license, registration and insurance fees, and no sales tax on a new car). Another 8 years with no gas and no oil changes, no new transmission, timing belt, water pump, no head gasket, no plugs, no fuel injection, so many less parts to break down and replace. And changing out that battery takes only a few minutes and you are on your way again!

Remember that there are 2 trends operating here:

Gas is getting more expensive (pump price doubled over last 8 years and the 8 years previous).

Batteries are getting cheaper (and better).

Also keep in mind the "black swan" factors. What are the chances of an oil supply disruption over the next decade? What are the chances of a real climate change panic (which might bring about emergency measures like gas tax increases or rationing)?

What is the value of a car that uses no gas under those circumstances?

Notice how after about 1000 cycles, the degradation hits 20% and is slowing, and it takes another 2000 cycles to lose another 10%. That's about ¼ the early rate!

Taking a full cycle as about 200 miles, that means 80% after 200K miles, and another 600K miles to get down to 70%. Total 800K miles. Who will reach it first? >:)

That 200 mi/cycle is a conservative number to accommodate speed, heating, cooling, etc.

8 years maintenance on even the average ICE car could easily match the added "fuel" cost of your hypothetical situation.

Btw if your math is correct at 0.13 cents/ mile and 0.17 cents/mile for the EV +battery sawp and ICE respectively that is still a 23.6% savings which i think is incredible in any case.

If the model S batteries are anything close to the first gen prius batteries in terms of longevity I think the Model S is a great choice for a car that is easy on running cost.

Occasionally I find myself making these calculations and then I remind myself that I did not buy the Tesla to save a few pennies on fuel. I bought it to get the best performance car on the market. The Tesla drives like a dream - that it doesn't use gasoline is also a major positive - I hate to pump gas, especially when I think of where that money is going.

If you really want to save money, buy a Leaf. If you really want to drive, buy a Tesla.

Dortor, you have serious flaw in your calculation. First, even w/o counting the the cost of fuel, the cost of running ICE vehicles is much higher than electric cars than u r estimating. But the biggest flaw in your argument is projected cost of replacing the battery pack. You are wrongly assuming the cost to replace the battery pack will remain the same...that is a big mistake...the cost of the battery is going down about 7% a year...so about 8 or 10 years when the time comes for u to replace the battery, the cost will be a fraction of the 12,000 dollars you referred...it will be more likely be in the range of 3 to 5,000 dollars....about the same amount of money u need to by a new ICE engine which is much less than the cost of replacing both the engine and transmission which is usually required with the ICE cars.

the figure I was using was the disclosed replacement cost of the battery pack - reduction in cost of future battery packs is so far a mythical assertion - and it may in fact be true - but the best available factual information is the quoted \$12,000 figure from Tesla itself. Once a price is established that shows a different cost the calculation are easily redone - otherwise we can make up any numbers we want to push the cost estimates any direction we want.

I prefer to stick with actual published numbers, not predicted future numbers that can and will most likely change (for better or worse)…

Also I find anything like swapping a 1000 lbs battery to only cost 3 to 5,000 dollars to a highly suspect assertion - because at a minimum there is labor involved and labor costs are not likely to drop into the future.

feel free to assert any cost adjustments you need to to make your personal reality fit your pre-conceived notions of what is going to happen

Me - I work with actual published numbers today- and adjust my calculations once new factual data is available. Also in the tech industry things don't normally go down in cost to the degree that you're asserting, but typically the price point remains the same but capability dramatically increases...i.e. there have always been \$100-\$200 hard drives - but the capacity of said drives is dramatically different over time while retaining the same price point

so a more likely scenario IMHO - is not a 85 kwh battery that costs only 3 to 5000 dollars (because just like the 40 kwh battery Elon decided not to make) but rather a 10-12k battery that is say 150 kwh - the price is still likely to in that ball park, but the capability will be dramatically different.

time will tell…

also - I would appreciate any actual data/refrences showing the cost of battery technology and replacement modules going down 7% per year. Prius, Leaf, and Roadster battery prices points have not reduced prices by 7% year as service parts - or at least not in any references I can find.

so on what actual basis is your 7% per-year reduction based - and if based on "technology" improvements I don't consider that a valid cost basis decision since raw tech. commodity prices has only a loose relationship with actual parts cost when it comes time to buy the manufactured parts that are packaged and available as a service part.

are you aware of, and can you share any actual prices of high kWh battery technology replacement parts as a serviceable item with a reduction in cost?

I suggest you read the following article to have a better understanding of Lithium Battery economics:

http://www.greencarreports.com/news/1084682_what-goes-into-a-tesla-model...

@dortor....one correction on my part...the 10,000 to \$12,000 battery replacement figure I believe takes into account cost decline in the next 3 or 4 years. Thus my figure of about 5,000 bucks in 8 years is probably overstated. If the batteries cost about 12,000 bucks in 3 years, then in 8 years it will be about 6 to 7000 bucks in 8 years and 5 to 6000 dollars in 10 years if trends continue as in last decade.

@ dorter,

I think you would be much better off getting the car and being extra cautious and conservative regarding your battery charging habits. For instance, owners have written that 50%-60% seems to be the ideal charge for the battery. If true, keep your battery charged around 50%-60% (that's still over 130 mile EPA range or 150 mile ideal range) and don't drive faster than 55 MPH in order to get the maximum range out of your charge, and make sure you use your car on a regular basis. On those rare days that you need additional range, charge up for those expected trips.

This type of car makes it far too easy to overthink our decision. I toiled for two weeks before finally reserving, and the battery lasting 8 years was the least of my concerns. I'm presuming that Tesla has done its homework there, and I don't want to worry myself about the payback credentials of the car when that's not really the reason I'm buying this car.

Ultimately, ask yourself why you are buying this car. There are other much less expensive EVs to choose from - Ford Focus, Nissan Leaf, Mitsubishi i-Miev, Toyota RAV4 (in California) - all of them less expensive than the Model S and with probably a better ROI considering their much lower cost of entry. The Model S buyer wants not only comfort and range, but also wants to make a statement that we can have our cake and eat it, too! :)

AR;
Intangibles are also economic "goods" -- what people will pay for. The "R" in ROI is not entirely monetary, necessarily. There is a sense of driving pleasure composed of a unique blend of excitement/arousal/control and serenity which Tesla seems to be able to offer that no other car can. So in that sense of "R", it may be very high indeed.

Not sure if I missed something in this thread, but has anyone mentioned second hand price of an 85kwh battery with say 70% left? SC's or homes with solar panel etc.

@ Brian H, yes there is definitely an intangible value to being a badass :) and that's exactly what you are when you drive this car.

@dortor - it is not a fair comparison as you've suggested "... consider the cost of the battery replacement in the annual cost to "fuel" an ICE vehicle "... You have made an unfair assumption that both gasoline fuel cost and cost of a battery will remain constant... you are forgetting the rapidly advancing world of technology and increasing demand for new car batteries will drive down the cost of a replacement battery exponentially... Do you remember the 1st generation plasma tv that came on the market which was selling at \$45,000?... the prices dropped dramatically in just a matter of few short years... and Today, we have bigger, brighter, sharper, and more energy efficient plasma tv than cost a mere fraction of the original plasma tv.

Dortor--I totally agree with you, that is 1 reason I took my P85 to the drag strip when it was brand new, it ran 12.6 seconds at 107 mph in the 1/4 mile, I plan on doing this every 6 months or so--Dennis

@Amped & Brian H

The "cool" factor cannot be computed, it can only be felt . . . and it feels great!

jt;
Actually, an economist would tell you that in principle it's fairly easy to compute. Just determine the effect on price point, and the size of the market segment that is willing to buy at any given price point because of it.